THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

CAROL COSTELLO, CNN ANCHOR: The evacuation of New Orleans does continue with both people and water being moved out. Let's look at the latest details of the critical mission along the Gulf Coast. New Orleans has now been secured; that, according to the commanding Lieutenant General Russel Honore. Police say the city has moved from chaos to organized chaos.

The military presence is being seen and felt all along the Gulf Coast. Currently, 38,000 National Guard members are on the ground, along with about 13,000 active-duty troops. Those soldiers have helped distribute a massive amount of food and water. So far, nearly nine million meals have been handed out, and that number will continue to grow.

The Coast Guard has been at the forefront of the rescue operations. They say they've rescued more than 22,000 people using boats and helicopters. And some of those evacuees will be getting back on boats. Several thousand will leave Houston for two cruise ships docked off the coast of Galveston.

And there is progress to report back in New Orleans. The break in the 17th Street Canal levee has been repaired. And the process of pumping the water out of the city has finally begun.

Search and rescue missions are a constant now in New Orleans, a city still largely under water, a city which the deputy police chief describes as destroyed.

Still, as CNN's David Mattingly reports, some people are refusing to leave.

(BEGIN VIDEOTAPE)

DAVID MATTINGLY, CNN CORRESPONDENT (voice over): Even as the floodwaters filled the first floor of his New Orleans house, Ralph Amat was determined to stay.

RALPH AMAT, SURVIVOR: A gutter came down and slammed into the side of the house.

MATTINGLY: There's a hole in the wall, and the roof needs fixing from the hurricane. The hardwood floors are wet and spongy from the floods.

Yet, the retired merchant marine is still willing to stay and take his chances. (on camera): What do you do all day?

AMAT: I pile up garbage.

MATTINGLY (voice over): There's no electricity, no running water, no phone and no promise of when they will come back. Amat is driven a need to protect his property. A .38 and a shotgun came in handy when looters twice tried to break in.

AMAT: I had shot at people. I didn't shoot to kill, which is not my fault. I -- I missed. I'm 69 years old. I'll be 70 in three days.

MATTINGLY: Sustained for the moment by occasional handouts of food and water from passing military patrols, authorities refer to Amat and others like him as "stragglers." And there could be thousands of them.

The world they live in reeks of stagnant water and sewage. There's a constant roar of helicopters overhead. Their once park-like streets are littered with disabled city buses and piles of trash.

(on camera): The smell of rotting garbage is so thick in some areas that it can take your breath away. But behind all of the filth and all of the debris, there are still neighborhoods, homes and lives that some people are refusing to leave behind.

PATRICIA KELLY, SURVIVOR: It's pretty much nice.

MATTINGLY: This is nice?

KELLY: Oh, as far as being out there, it's OK here. This is how we sleep.

MATTINGLY (voice over): Pat Kelly is a missionary forced out of her flooded home. She waits to return to her flooded church and for word from her family, taking up residence for now on the open porch of a beauty parlor. She and three others sleep on salvaged mattresses among the flies and stray dogs.

(on camera): But you had the option of leaving. Why do you stay?

KELLY: To leave and go where, sir?

MATTINGLY: You'd rather stay here on a porch?

KELLY: Oh, I'm doing fine, you know, because my children are up in age, and it's not like I have my small babies with me or anything. So, I'm fine.

MATTINGLY (voice over): But as each day passes, more of the stragglers decide it's time to go.

After holding out for a week, hopes of hearing from her missing son, Fati (ph), Bettie Perrier is among those who are saying good-bye to a ravaged city.

BETTIE PERRIER, SURVIVOR: If he hear me, your mamma and daddy is gone to the Convention Center, and we don't know where we're going from there.

MATTINGLY: But many won't be moved. City buses continue to provide transportation to evacuation centers, but none of them is full. The pull of home, such as it is, is just too strong.

David Mattingly, CNN, New Orleans.

(END VIDEOTAPE)

COSTELLO: Imagine going from a war zone to a disaster area. That's what nearly 3,000 members of a National Guard unit from New Orleans are doing. They're returning home from Iraq this week in the wake of Hurricane Katrina.

Major John Wells is one of them. He spoke to me from Baghdad earlier this morning, and I asked him what he feels knowing that most of the city he calls home just won't be the same.

(BEGIN VIDEO CLIP)

MAJ. JOHN WELLS, 256TH BRIGADE COMBAT TEAM: It's funny you mention that, because one of the things that I was looking forward to the most was just getting back. And I had a plan to rediscover my city and go to all of the places that I've been to before but have been missing so much since I've been here.

Now, the plan will be just be put off a little bit. But New Orleans is such a wonderful city because of the people there that I know it will come back, and it will probably a little bit different than it was before. But the city has always changed with the population, and I know that it will just continue to be a unique city.

(END VIDEO CLIP)

COSTELLO: We hope so. The major's family did manage to get out in time. His wife and children are safe and sound.

As for damage to his home, he doesn't know the answer to that question just yet.

Should you help to bear a cost of a huge hurricane? Some officials say you should. In the wake of Hurricane Katrina, there is as renewed push to set up a national catastrophe fund. It would spread the cost of dealing with natural disasters among all taxpayers or property owners, not just the people in the affected state.

Florida, no stranger to hurricanes, has long been pushing for such a fund.

Governor Jeb Bush says: "The concept is that there are disasters that take place -- floods, earthquakes, hurricanes, fires. And it makes sense to share that risk in a broader way than just one state bearing the burden."

And that has been our e-mail question this morning, and we've got so many e-mails from you. Chad is back to read some more.

CHAD MYERS, CNN METEOROLOGIST: If we make a national fund for disasters, Carol, can we use it to cover the cost of my heating bill this weekend? Man, oh, man, is it getting high up there as well, some of these gas prices, natural gas prices going up for the winter heating as well.

Car insurance premiums are based on driving history. So shouldn't hurricanes be based on disaster history and likelihood?

"Here we go again," says Mary Ann. "Another tax to the poor. Living in a $50,000 home, contributing to the insurance of million- dollar homes that are routinely destroyed, I just don't think so. That's not a great idea."

And from Janice in D.C.: "Do not allow people to rebuild in flood plains. There have been decisions made by states, other states along the Mississippi not to rebuild. Several river locations are no- build zones. Let's make national parks out of some of these areas that are repeatedly flooded or hit by storms. Why should everyone pay for bad decisions made by a few people?"

Carol.

And thanks for your comments this morning. Thank you, Chad.

Still to come on DAYBREAK, pump that oil. We'll get the latest on the Gulf rigs and the prices at the pump from Carrie Lee.

And the delay in getting help to hurricane victims has some crying racism. We'll take a closer look at little later.

But first, here's a look at what else is making news this Tuesday.

(COMMERCIAL BREAK)

COSTELLO: A look at how the international markets are trading them. Tokyo's Nikkei down 35 points, the London FTSE up 14, the German DAX up 21.

It looks like oil prices are finally heading lower. That's the subject of our business buzz.

And gas prices are down a tad.

CARRIE LEE, CNN FINANCIAL NEWS CORRESPONDENT: Yes. Well, we're still about $3.00 a gallon, though. So, but they are still pretty high.

COSTELLO: Yes, but AAA just came out with the latest figures -- $3.04 a gallon. That's down 1.6 cents from Monday.

LEE: Hey, we'll take it at this point, right? Anything to get gas prices down even a little bit.

And oil, a little bit lower as well. In overseas trading, crude oil now hovering near $66 a barrel. And that's actually a sharp drop from Friday.

A group of industrialized countries plan to release 60 million barrels of crude from their emergency stockpiles to help ease tight supplies.

Now, still a lot of analysts say we have not seen the end of higher oil prices. Katrina shut down eight major refineries that produce everything from gasoline, diesel, jet and heating oil. And those refineries are slowly starting up again, but reports say, still, almost 70 percent of normal oil production and half of the natural gas output is still remaining shut down.

Now, a lot of analysts think gas prices could now remain above the $3.00 mark for the rest of the year. Thirty-five states and the District of Columbia already have prices averaging $3.00 or more for regular.

Crude oil and gasoline aren't the only energy products in short supply. Expect to pay more for you home heating oil this winter. One analyst says heating bills could be up to $700 more this year than last year.

So, we really have pretty long-term ramifications from this, at least going through the next couple of months.

COSTELLO: Seven hundred dollars more?

LEE: That's the average, yes.

COSTELLO: That will break some people.

LEE: It certainly is. And high gas prices on top of this. People are really going to have to take a look at their budgets and cut where they need to.

COSTELLO: You got that right.

LEE: Yes.

COSTELLO: Carrie Lee, thanks very much.

LEE: OK.

COSTELLO: Your news, money, weather and sports. It is 6:42 Eastern. Here's what's all new this morning.

Emergency personnel waved red flags before Katrina struck. Congressional investigators warned the Bush administration this summer that some first responders were concerned about their training and equipment, specifically that it was tilted too much toward combating terrorism rather than natural disasters. In money news, it looks like Katrina also took a bite out of Labor Day travel. AAA says not as many Americans were on the road, apparently reflecting the higher gas prices caused by the disruption of oil production in the Gulf.

In culture, Robin Givens will make her Broadway debut as the new Roxie Hart in "Chicago." Givens will join the musical cast at New York's Ambassador Theater in January.

In sports, Andre Agassi whipped Xavier Malisse Monday to advance to the U.S. Open quarter-finals. It is the first time in 14 years that a male player over 35 has made it that far. It's so depressing to think 35 is that old, but I guess it is in the world of sports.

MYERS: Yes. I guess.

COSTELLO: I guess.

MYERS: I can't even get my knees to work now.

(WEATHER REPORT)

COSTELLO: That's a look at the latest headlines for you.

Still to come on DAYBREAK, a lot of criticism lately over the government's handling of the Katrina aftermath. Is race a factor? And will Barbara Bush's latest comments pour fuel on the fire? We'll get some perspective right after the break.

(COMMERCIAL BREAK)

COSTELLO: It is 6:47 Eastern. There is a little bit of problems out in the Atlantic Ocean, which is causing some travel delays, or maybe not.

Let's head to the forecast center to check that out.

(WEATHER REPORT)

COSTELLO: By now, it is a familiar refrain, the blame game. Don't play it now. Later is better.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: There's plenty of time for the blame game later on.

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: This is not a time to get into any finger-pointing or politics or anything of that nature.

UNIDENTIFIED MALE: Now is not the time to blame anyone. Now is the time to come together.

UNIDENTIFIED MALE: It's still too early to do too much finger- pointing. (END VIDEO CLIP)

COSTELLO: Of course, there are two ways to look at that. One, it's true it is better, but for some it's a political diversion, directing attention away from what they see as a bitter truth.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: I'm calling for them to take care of Americans regardless of their color. Significant numbers of people in the Gulf are African-American. And we stand here because we are concerned about them.

REV. AL SHARPTON, CIVIL RIGHTS ACTIVIST: I've said unequivocally that I feel race was a factor.

JESSE JACKSON, CIVIL RIGHTS ACTIVIST: There's a sense of alienation, a sense of distance, and we don't feel good about it.

UNIDENTIFIED MALE: George Bush doesn't care about black people.

(END VIDEO CLIP)

COSTELLO: We know by the number of e-mails we have received the talk in your living room was hot about this issue, and we're going to talk about both sides of the issue.

We'll start with Callie Crossley, a media critic and social commentator.

Welcome, Callie.

CALLIE CROSSLEY, MEDIA CRITIC: Hi. How are you, Carol?

COSTELLO: I'm fine. When you hear it's not the right time to point the finger, doesn't that seem reasonable?

CROSSLEY: Yes. I don't -- I actually don't have a problem with that. I think that there are, however, some things that have to be raised as we go forward with coverage. And, in fact, by talking about it some changes have already been made. And I will point specifically to the use of the word "refugees" at the outset by journalists across the board, and now that word has been pretty much universally replaced with "evacuees."

Now, why does that make a difference? It makes a difference because refugees gives the impression that these people are "the other," somehow different, not American, where if you use the word "evacuees," you're really referencing the action and what has happened to them. And you are able to, I think, take an edge off of the perhaps stereotype about the people who were most affected here.

COSTELLO: But do you believe, as Kanye West said, that the president doesn't care about black people, and that's why the rescue effort didn't happen as fast as some people would have liked? CROSSLEY: I can't think about Kanye West's comments in terms of what he may believe about President Bush. Here is what I can say about it. If you're looking from the outside, and not just from other Americans, but from around the world, nobody can understand why food and water could not be dropped to the population as the situation was getting increasingly desperate.

I mean, Carol, you know, the reporters were crying, saying to the government officials, food and water? Why can't we get food and water?

So, it's very hard for people to understand why that couldn't happen. And it leads you to think, well, if this was a different kind of population, if this population were not poor, if this population were not predominantly African-American, would something have happened faster?

You might be able to say the other response getting out to some of the other communities, bringing people out, some of the other response could be delayed. But not being able to do something as simple as getting food and water dropped, you know...

COSTELLO: But by saying that, Callie, aren't you saying -- and that's petty callous. Just because people are poor, you don't get aid there in time? I mean, on purpose?

CROSSLEY: I don't think that -- I don't think -- I'm saying, you asked me the question of why people would think that. And so, I'm saying this is the image that remains as the result of it, because you're looking to try to find a reason for it. You know that this is the most powerful nation in the world. And you can look and see what happened during the tsunami when food and water was dropped immediately by our people.

So, you have to ask the question, well, why is that not happening on our own shores, within our own country? What's the problem here?

COSTELLO: Well...

CROSSLEY: I think we're dealing with images that people can't shake. That they've been there for so long, they're so entrenched some of the stereotypes. And it's hard for people to respond positively when they don't see that the response was forthcoming.

COSTELLO: Right. I know that President Bush is trying to repair the damage, because he says he does car. His mother and father, Barbara Bush and George Bush, Sr., toured the Astrodome in Houston, visiting the evacuees.

Barbara Bush said on National Public Radio and I quote. She said: "Almost everyone we talked to said we're going to move to Houston, and so many of the people in the arenas here, you know, were underprivileged anyway. This is -- this is working very well for them."

What do you think she meant by that? CROSSLEY: Again, I can't assess what she may or may not have meant. I'm going to, just looking at it and taking it at face value, I assume she means that this could be step up for people who were not doing well where they lived originally. But, you know, that's not for any of us to say.

Those were the homes of people. They had made their home there. And I think we have to understand -- somehow get to the point of understanding what is the population here and get a way to describe it.

I think the journalists really have been struggling with really how to describe using a language for poverty, because this is not an arena we cover. These are people who are mostly invisible to us. They do the service work, and they disappear.

I think it's really hard for people to understand folks without means, folks without ability to get themselves from one place to the next, because they don't have the financial wherewithal.

I think some of the journalism that's been reported recently has been brilliant and really detailing, I mean detailing. For example, describing from one man, he said, I make $340 a month. I mean, how could I get myself out, you know?

COSTELLO: Yes. And I don't have a car or the means to get out.

CROSSLEY: Exactly.

COSTELLO: Callie Crossley, thank you for joining us this morning.

We want to get to the other perspective now. Bob Parks, a former Republican congressional candidate, who has written on this topic.

President Clinton, by the way, said exclusively on CNN, we failed these people.

So, Bob, it's your turn now. You wrote a column on americandaily.com. And you're very upset at the images of blacks looting. You write, and I quote: "Black people in New Orleans should be made to understand that the whole world is watching. Any racism people may have is being justified every time they turn on their televisions."

Some might say that statement is racist. Aren't you using a broad brush?

BOB PARKS, AMERICANDAILY.COM: Well, when the perception is given on worldwide television that the only people who are doing the looting are black, first of all, I just don't understand in a situation like that is over this need to loot. We have been through this before with the Rodney King riot. I mean, there's just times when you need to get everybody together. There are boneheads in the world that will do things. And, you know, the looting, the lawlessness in New Orleans set back any progress that could have been made to get initial relief in. Right now, there obviously is a concerted effort to make this look like -- it was planned as a racist thing in the first place, like the Bush administration just decided they were trying to try to exterminate black people on worldwide television. I think that whole notion is absurd.

And I think the real story, which a lot of people are being very careful to navigate around, is to find out what was the lack of response from the local and from the state.

COSTELLO: Well, Bob, why is the sentiment out there that many in the black community feel that this was the reason that the response was so slow, because these people were poor and black?

PARKS: Well, because that is the story that a lot of pundits are putting out right now. I think there's a lot of damage control going on as far as the people who were really on the ground there who could have made the decisions. They did not. And it is an attempt to -- and anytime the people who make money on race, whether they be civil rights activists, these people are always looking for a reason to play the race card and say that Republicans and conservatives really just want to kill all black people. And here was a perfect opportunity.

COSTELLO: Who are you specifically talking about?

PARKS: Oh, well, let's see. Jesse Jackson was in town, was in Baton Rouge, for example, making incendiary statements. Let's see, Kanye West said black people -- or that George Bush didn't care about black people. You know, and for public policy experts like Kanye West to say things like that, I would venture to say the people who were being -- the women who were being raped in the Superdome were probably more influenced by people like Kanye West and his peers than by George W. Bush.

But, you know, at the same time, he's now concerned about the media perception of blacks when you look at the kind of music he puts out.

But anyway, I'm sorry to get off the subject a little bit.

COSTELLO: Yes, we have to button this up, unfortunately.

PARKS: Sure. But, you know, I don't -- I guess sort of the main racist comments that were looked at were when black people were looting, it was called "looting." When white people were seen looting, it was called, "finding what they need to survive." If that's the case, then that's on the media. That has nothing to do with what black people were doing or what white people were doing. Those perceptions come back down to the media, and media has been known to play these kinds of games before.

COSTELLO: All right. Bob Parks, thank you for your perspective. Bob Parks, a former Republican congressional candidate. And, of course, he's written vastly on this topic. We're going to take a short break. We'll be back with more.

(COMMERCIAL BREAK)

COSTELLO: From the Time Warner center in New York, I'm Carol Costello along with Chad Myers. Much more on Hurricane Katrina on "AMERICAN MORNING." It starts right now.

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